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                AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT

          This Amendment Number One to Loan and Security Agreement 
("Amendment") is entered into as of December 8, 1998, by and between FOOTHILL 
CAPITAL CORPORATION, a California corporation ("Foothill"), and SILICON 
STORAGE TECHNOLOGY, INC., a California corporation ("Borrower"), in light of 
the following:

          FACT ONE:  Borrower and Foothill have previously entered into that 
certain Loan and Security Agreement, dated as of September 22, 1998 (the 
"Agreement").

          FACT TWO:  Borrower and Foothill desire to amend the Agreement as 
provided for and on the conditions herein.

          NOW, THEREFORE, Borrower and Foothill hereby amend and supplement 
the Agreement as follows:

          1.   DEFINITIONS.  All initially capitalized terms used in this 
Amendment shall have the meanings given to them in the Agreement unless 
specifically defined herein.

          2.   AMENDMENT.

               Section 7.20 of the Agreement is hereby amended to read as
follows:

               "7.20     FINANCIAL COVENANT.  Fail to maintain Tangible Net 
          Worth of at least $24,000,000, at all times during the term of this 
          Agreement, measured on a fiscal quarter ending basis; PROVIDED, 
          HOWEVER that Foothill shall be entitled to reset this financial 
          covenant for each fiscal quarter after December 31, 1999, based 
          upon Borrower's financial projections for the year 2000."

          3.   REPRESENTATIONS AND WARRANTIES.  Borrower hereby affirms to 
Foothill that all of Borrower's representations and warranties set forth in 
the Agreement are true, complete and accurate in all respects as of the date 
hereof.

          4.   NO DEFAULTS.  Borrower hereby affirms to Foothill that no 
Event of Default has occurred and is continuing as of the date hereof.  

          5.   CONDITION PRECEDENT.   The effectiveness of this Amendment is 
expressly conditioned upon the following:

               (a)  Payment by Borrower to Foothill of an amendment fee in 
the aggregate amount of $ 2,500, such fee to be charged to Borrower's loan 
account pursuant to Section 2.6(e) of the Agreement; and
                    
               (b)  Receipt by Foothill of an executed copy of this Amendment.

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          6.   COSTS AND EXPENSES.  Borrower shall pay to Foothill all of 
Foothill's out-of-pocket costs and expenses (including, without limitation, 
the fees and expenses of its counsel, which counsel may include any local 
counsel deemed necessary, search fees, filing and recording fees, 
documentation fees, appraisal fees, travel expenses, and other fees) arising 
in connection with the preparation, execution, and delivery of this Amendment 
and all related documents.

          7.   LIMITED EFFECT.  In the event of a conflict between the terms 
and provisions of this Amendment and the terms and provisions of the 
Agreement, the terms and provisions of this Amendment shall govern.  In all 
other respects, the Agreement, as amended and supplemented hereby, shall 
remain in full force and effect.

          8.   COUNTERPARTS; EFFECTIVENESS.  This Amendment may be executed 
in any number of counterparts and by different parties on separate 
counterparts, each of which when so executed and delivered shall be deemed to 
be an original. All such counterparts, taken together, shall constitute but 
one and the same Amendment. This Amendment shall become effective upon the 
execution of a counterpart of this Amendment by each of the parties hereto.
          
          IN WITNESS WHEREOF, the parties hereto have executed this Amendment 
as of the date first set forth above.
                                       
                                    FOOTHILL CAPITAL CORPORATION,
                                    a California corporation      


                                    By: /s/Thomas Sigurdson                    
                                        ---------------------------------------

                                    Title: Vice President                      
                                           ------------------------------------
                    

                                    SILICON STORAGE TECHNOLOGY, INC.,
                                    a California corporation

                    
                                    By: /s/ Jeffrey L. Garon                   
                                        ---------------------------------------

                                    Title: VP/CFO                   
                                           ------------------------------------

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